HP has completed its £6.7bn acquisition of UK firm Autonomy, following approval by shareholders
Tech giant HP has finally completed its $10.3 billion (£6.7bn) acquisition of British software firm Autonomy, after being given the green light by Autonomy’s shareholders last night.
HP said that 87.3 percent of Autonomy’s shareholders accepted its offer of £25.50 per share – 79 percent more than Autonomy’s stock price on 18 August, when HP first lodged the bid. Autonomy offers solutions that will strengthen HP’s data analytics, cloud, industry and workflow management capabilities, the company said.
Mike Lynch, chief executive of Autonomy, who will continue to lead the company as a separate business unit within HP, said that this was a historic day. “We are at the dawn of a new era when it is the ‘I’ in IT that is changing, not just the ‘T,’” he said.
Deal goes ahead despite CEO change
The news comes despite HP’s recent decision to oust chief executive Leo Apotheker, who initiated the deal. HP’s embattled board of directors immediately installed one of its newest members, former CEO of eBay Meg Whitman, to replace Apotheker on a permanent basis.
Whitman (pictured) said shortly after her appointment that the Autonomy deal would still go ahead. However, she backtracked on Apotheker’s suggestion that HP would spin off its PC unit, promising to recommit to the hardware business.
“The exploding growth of unstructured and structured data and unlocking its value is the single largest opportunity for consumers, businesses and governments,” said Whitman in a statement yesterday. “Autonomy significantly increases our capabilities to manage and extract meaning from that data to drive insight, foresight and better decision making.”
‘Absurdly high’ price
The purchase price for Autonomy has been widely criticised by market analysts as too high, but British takeover rules make it is virtually impossible to reverse a firm bid offer. HP’s shares have fallen 47 percent this year, making it one of the worst performers in the Dow Jones index of leading US companies.
In particular, Oracle chief executive Larry Ellison has criticised the purchase price as being “absurdly high”. The company claims that Autonomy shopped itself to Oracle ahead of the HP acquisition, but was turned down because it was overpriced.
Following these remarks, Lynch told the Wall Street Journal that Ellison’s remarks were “inaccurate”. If Autonomy was indeed presented to Oracle as an acquisition target, it was done without Autonomy’s involvement, Lynch said.
Oracle responded by upping its original claim: not only had Autonomy been shopped to Oracle, but Lynch had directly approached Oracle about an acquisition in April of 2011. The company published two PDF documents which it claimed were used in the course of the meeting. The Oracle president at the meeting, Mark Hurd, is of course a former CEO of HP.
Oracle is not the only company taking advantage of the turmoil to take pot-shots at HP, with Acer saying it is looking to exploit the situation to expand its PC business.
HP’s shares closed 1.1 percent lower on Monday, outperforming the wider market.